Category: Breach of Contract

Court of Appeal Restricts Effectiveness of Trade Union Negotiation

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In 2002 the European Court of Human Rights decided the case of Wilson v UK and found that UK trade union legislation was contrary the Article 11 of the  European Convention on Human Rights – in particular, at paragraph 48 of Wilson the ECHR found that

by permitting employers to use financial incentives to induce employees to surrender important union rights, the respondent State has failed in its positive obligation to secure the enjoyment of the rights under Article 11 of the Convention. This failure amounted to a violation of Article 11, as regards both the applicant trade unions and the individual applicants.

The UK governments response to the judgement was to introduce new legislation in 2004 which is set out in sections 145A to 145F of the Trade Union and Labour Relations (Consolidated) Act 1992. 

Restrictions on Inducements to Union Members

Section 145B of the Act is the specific section that addresses the prohibition of inducements by an employer to its workers to have terms and conditions directly negotiated with the employer and worker independently of the trade union.

Section 145B introduces a right to individual trade union members of a trade union who is recognised by the employer for collective bargaining purposes (or by a union seeking to be recognised) not to be have a contractual offer be made directly to the worker would when accepted have what is called the ‘prohibited result’ and this result was the employer’s main or sole purpose when making the offer.

The section does however provide some limited circumstances, in section 145D.

The Basic Facts in Kostal

There has been very little caselaw on section 145B. As a union representative there has only been one time I have had occasion to consider it as a possible course of action. It’s prominence however rose with the decision of the EAT in 2017.

The basic facts in Kostal was that Unite was recognised by the employer for collective bargaining purposes and was negotiating with the employer about the pay award. The union and the employer did not reach an agreement but the offer went to a membership ballot and 80% of union members rejected the offer.

Disappointed with the outcome of the union ballot the employer decided that it would make precisely the same offer to each employee directly and that those who accepted, and those only, would receive not only the pay award but a Christmas bonus, those who refused would not.

In the new year the employer also wrote directly to every worker who refused the direct contract change offer and advised that that the employer was considering dismissing those workers who did not agree. The employer in making that offer made no reference to this being a dismissal and re-engagement on new terms dismissal.

The EAT and ET both found the purpose of the employer’s actions was to undermine collective bargaining. The Employment Tribunal itself commented that

it is not permissible for an employer to abandon collective negotiation when it does not like the result of a ballot, approach the employees individually with whom it strikes deals and then seek to show its commitment to collective bargaining by securing a collective agreement which is little more than window dressing – having destroyed the union’s mandate on the point in question in the meantime. In other words, if there is a Recognition Agreement which includes collective bargaining, the employer cannot drop in and out of the collective process as and when that suits its purpose.

Unfortunately, the effect of the Court of Appeal’s judgement in Kostal, independent of the issues in section 145D is that employer’s has been licence to do just that.

In the Court of Appeal the court (45) noted and appear to have accepted that the decision to make individual offers meant that it was “exceptionally improbable that the company did not intend to circumvent the collective bargaining process when it made the offers: in effect (eliminating the double negative) they found, and were entitled to find, that Kostal’s purpose was to circumvent the collective bargaining process.” And yet, even though none of the caveats to this right in section 145D applied, that this was in large part the issue in Wilson, accepted this description but still left open the question of whether the prohibited result was engaged. 

The prohibited reason is set out in 145B(2) and states that prohibited result is “that the workers’ terms of employment, or any of those terms, will not (or will no longer) be determined by collective agreement negotiated by or on behalf of the union.”

One would think that the fact that by reason of the employer’s decision to avoid negotiating any change of contract on the yearly pay settlement with the union, even if they were willing to do so in the future if the union were more ‘compliant’ the “will not” provision would have been met. But the Court of Appeal had other ideas.

Court of Appeal

In it decision last week the Court of Appeal substantially restricted the circumstances in which a union member will be able to allege unlawful inducements to forego collective bargaining when an employer does not like the negotiating position a recognised trade union adopts to two situations in situations where it is not alleged that the employer is not motivated by express anti-union motives.

First, where a union seeks recognition but the employer makes an offer that would mean that their terms and conditions would not be subject to a collective bargaining unit.

Second, where the employer in making the offer intends to to permanently remove the term or condition from collective bargaining.

If inducement is not for one of these situations then the decision is not a prohibited reason, this would even apply where the employer is motivated by a desire to weaken the union’s bargaining position, as on the summary appears to be the motive of the employer in this case.

The rationale of the decision was that although the literal reading of the statute advanced by Unite was possible this cannot have been Parliament’s intention because that would give a veto over any changes and Parliament cannot have intended that. I am unpersuaded that is really the case on the issue of veto, why not? It is surely proper that in bilateral negotiations upon which agreement is necessary   that each party have a veto. And, besides which, as the initial tribunal noted it is not as though the employer is wholly without options, if the terms is truly necessary, it is open on an employer to serve notice on a dismissal and re-engagement basis which so long as the reason is a reasonable one (within the band of reasonable responses) it is unlikely attract compensatory liability to the employer.

Kostal is a dangerous and anti-union decision. It is not hard to see this will be abused and it is not as though there is a swell of tribunal claims on unlawful inducement grounds that the decision is quelling. Instead the Court of Appeal has given licence to employers to intermittent disavowal of collective bargaining to push through changes that are beneficial to the employers and against the interests of workers. This is acceptable so long as this disavowal and avoidance is ‘temporary.

And the Court’s refrain that this is all OK because the workers can always strike (leaving aside that new strike laws make that more and more a hypothetical right only) it is a strange argument that effectively encourages unions to undertake industrial action and increase industrial unrest.

It is certainly welcome that Unite have already announced that they have sought permission to appeal the decision to the Supreme Court. It may be that the case is also ripe for a further challenge, if necessary, to the ECHR on Article 11 grounds.

 

 

Haywood and the Contract End Date in Employee Dismissals

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pexels-photo-273011.jpegLast month the Supreme Court gave its decision in Newcastle Upon Tyne- Hospitals NHS Foundation Trust v Haywood.  The case can be summarised simply as addressing the question when does a persons notice period when dismissed from their employment end if they are not informed of the dismissal verbally. The three main answers to that question are:

  • The notice period begins when a letter (or theoretically) email is sent to the employee (the date of posting option); or
  • The notice period begins when the letter would reasonably be expected to be read (the reasonable date of receipt option); or
  • The notice period begins when the letter is actually read by the employee (the actual date of receipt option).

This is often a real issue. In many dismissal cases, and I think in most cases this is what an employer should do, the employer will call the employee into a meeting an verbally inform them they are being dismissed. In these cases the date of the letter is not an issue as the decision has been clearly communicated. However, this is not always possible. In fact, oftentimes an employer will not give the news face to face to avoid a confrontation and will just send a letter dismissing the employer – it is in these cases that the Haywood decision is relevant.

Before explaining the case itself a brief recap of what a notice period means. When a employment contract is brought to an end notice of the end must be given to the other party. A failure by an employer to give notice when they are under an obligation to do so will amount to a breach of contract and a possible claim of wrongful dismissal. There are only a few situations where an employer can evade giving notice, off the top of my head the only two I can think of is if a contract ends by ‘frustration’ and where an employee is dismissed for gross misconduct.

A person’s contract of employment will state how much notice needs to be given to end the contract. What this means is that the employment will not end until that notice period has expired. Any notice period must meet the notice period in the contract. If the contract is silent on notice period – or if there is no written contract – then the law states that a reasonable notice period must be given. Section 85 of the Employment Rights Act 1996 also sets out in legislation a minimum period of notice that must be given . Therefore, at a minimum (the contract or reasonable period may require more) is not greater a person’s notice period will be :

  • One week if the employee was employed for less than two years;
  • One week for every full year employed up to twelve years employment;
  • Twelve weeks notice if employed for at least twelve years.

What was Haywood about?

The facts of Haywood are unusual because the issue of when the claimant’s contract ended  (i.e., the date her employment ended) were the deciding factor in whether she would receive a much more generous pension benefit that ran into the thousands of pounds. The basic facts of the case were:

  • The employer sent Mrs Haywood a letter dismissing her from employment on 20 April 2011 by recorded delivery.
  • The recorded delivery letter was signed for by Mrs Haywood’s Father on 26 November but it was not read by her until 27 April 2011 when she returned from a vacation.
  • The basic issue to be decided was when the notice period began. If it began on 26 April Mrs Haywood would not qualify for an enhanced pension, but if it began on 28 April 2011 she would benefit from the pension benefits.

Lady Hale giving judgement for the Supreme Court set out that “There is an implied term that written notice runs from the date it is read, or if earlier, the date one had a reasonable opportunity of reading it.” Because 27 April 2011 was the first date that Mrs Haywood had a reasonable opportunity to read the dismissal letter that is the date the notice period began. This means that unless there is an express term allowing to the contrary the notice period will commence when an employee receives and reads the dismissal notice or, if they have not, would reasonably have done so.

If this seems harsh on an employer because it is uncertain when a dismissal takes effect the court highlighted that there is no reason employers could not make an explicit contractual term saying notice began when posted or, preferably, communicate dismissal decisions in person.

What is the significance of the case for union representatives and employees?

From an academic point of view the judgement is interesting. It was a split 3:2 decision which tends to point to interesting debates of law and in this respect it seems to me that the decision of the majority is indicative of an, in my view appropriate distinction between common law contractual principles and the reality of contracts, and attendant power differentials, in a specific employee-employer context.

However, practically speaking the case raises a number of issues that employees should be aware of aside from the exceptional circumstances of the case.

First and foremost, where a dismissal has been communicated by letter it is important to ascertain when a decision was actually received and read and, if there is a gap between the two identify the reason for this. If there is a reasonable reason why there is a delay between when an employee was sent and actually read the letter then the notice period may not begin until a few days or even weeks later.

For example, if an employer sends a letter to an employee dismissing them from employment giving them four weeks notice and it is delivered on a Monday but, in fact on the employee does not read it until the following Monday because they were an in-patient in hospital for that period the employee will have a case for saying their dismissal should not take effect until five weeks after the letter was send. In short, this means that the employer may owe the employee an additional week’s salary. In a situation where money is tight and finding new employment is difficult an extra week’s salary can make a significant difference in the ability to financially cope with a dismissal.

Second, in Haywood it was pension benefits that the ‘additional’ notice period guaranteed. Trade union reps should obviously be alert to this but of more significance is to explore whether any period will secure statutory rights. For example, in most unfair dismissal claims an employee can only pursue a complaint of unfair dismissal if they have been employed by a minimum of two years. It is not unknown for an employer, conscious that an employee is soon to qualify for statutory rights, and takes action to dismiss an employee before these come into effect. If an employee does not receive a decision until after then (even though issued before) then the employee will likely qualify for employment rights after all.

It is worth adding a note of qualification here. The key date in unfair dismissal claims if the ‘effective date of termination’ this is not a contractual term but a statutory one. In an earlier decision the Supreme Court determined in Gisda Cyf (2010)  that an effective date of termination is to be assessed by essentially the same considerations in Haywood which is conceptually helpful as the contractual termination date and statutory effective date of termination should after Haywood be synonymous.

Third, a likely consequence of this judgement is twofold. Either that new employment contracts will more frequently have express terms with regard to service of notice, something unions and employees will need to be alert to when new contracts are agreed. More likely, employers will now more frequently seek to serve a decision upon a person in person at a face to face meeting. This will signal a change of approach from how some employer approach formal meetings; many take the approach that a meeting is convened to hear evidence but not give a decision face to face, this can be a detriment to the employee’s case as, for some managers at least, telling someone face to face that they dismissed, looking into the employee’s ‘white of the eyes’, is more difficult.

Fourth, Lord Briggs in his dissenting judgement commented that

Contracts of employment determinable on notice have been around for hundreds of years, and there must be many millions extant in the common law world at this moment which must be taken to have had such an implied term embedded in them from the moment when they were made. The use of the post to give such notice has been an accepted method for well over a century, even if recent advances in information technology may well mean that it has only a few more years of useful life.

One of the first issues a law student will encounter when being introduced to contract law is the strange rules that have developed around contract negotiations by post. In Adams v Lindsell (1818) B & Ald 681 for example a person accepting a contract by post will have a binding contract from postage immediately, even if the letter is never delivered. By contrast, in Stevenson, Jacques & Co v McLean (1880) 5 QBD 346 a letter revoking a contract is not effective on posting but only on delivery.

Haywood is in some ways an extension of these contract cases but, as Lord Briggs notes, with changing forms of communication even without face to face service of decisions,  “recent advances in information technology may well mean that it has only a few more years of useful life.” The implication being that email, or even instant messaging solutions, may replace post as the main alternative to giving decisions in person. Lord Briggs is no doubt correct and if it does then the question of whether a person ‘reasonably’ does not receive a dismissal notice nearly contemporaneously given the near constant use of smartphones and similar communications devices. But it strikes me as we approach the onset of GDPR in just five days that may raise a range of other issues. If a person has not explicitly consented to electronic communication is such service lawful – whilst I can see that use of personal information would likely satisfy the condition that “processing is necessary for the performance of a contract to which the data subject is party” if there is no explicit consent and especially if the employee has set out a wish not to be contacted except by post then would service, the mode of which may well be unlawful, constitute effective service?

Fourth, so far this post has considered the sole employee being dismissed. However, where an employer is looking to dismiss multiple, and potentially hundreds of employees then Haywood has the potential to cause significant difficulties for employers with the prospect of different dismissal dates for the employees in the same redundancy exercise. It seems to me that here there is a significant impetus to unions, as part of the collective consultation to negotiate generous notice periods that go beyond statutory and contractual minimums so as to mitigate this detriment to the employer and secure benefits for members.

 

 

Affirming Gross Misconduct

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At the beginning of the mofirednth I posted What Will the Papers Say?, a piece on the High Court’ s decision in Williams v Leeds United Football Club [2015] EWHC 376 (QB).

Briefly, the claimant, then a Director for Leeds Utd FC, had sent pornographic images using the football club’s IT to three people: Dennis Wise, Gus Poyet and a LUFC administrative worker. Not one of the recipients made a complaint about the email and the football club had no knowledge of the misconduct.

A significant time later the football club gave notice to the claimant to terminate his contract which amounted to a year’s salary. However, after agreeing the termination but before payment was made the football club became aware of the earlier misconduct and launched disciplinary proceedings which resulted in the claimant’s dismissal.

Gross Misconduct is, at root, a matter of contract; it is conduct that is capable of destroying the relationship between the employer and employee. In the Williams case even though there was a delay in the employer discovering the misconduct when it did so it was open to the employer to respond by considering the contract terminated by the employee’s actions – even though there was a significant delay between the employee’s misconduct and the employer’s knowledge of the misconduct.

But what if LUFC had known about the misconduct previously but had declined to act? In Williams Lewis J covers this state of affairs by finding that in such a case LUFC would not be able to justify dismissal (paragraph 70):

Sixthly, Mr Barnett submitted that if the Club knew that the Claimant had forwarded the e-mails to Mr Wise, Ms Lamb and Mr Poyet prior to deciding to dismiss then the letter of 23 July 2013 affirmed the existence of the contract. I accept that if those who took the decision did know those facts prior to the decision to terminate the contract, then the letter of 23 July 2013 would amount to an affirmation of the contract of employment and that the Club could not thereafter rely on those facts as justifying dismissal.

In the same way that an employee when considering resigning from their employment and claiming constructive dismissal in response to a fundamental breach of contract must act quickly to avoid being seen to have affirmed the contract so an employer must likewise act quickly.

So, to amend the narrative somewhat, suppose Mr Williams still sent the emails but the following day reflected this was a big mistake and confessed the act to the LUFC Chief Executive. The Chief Executive is not happy and admonishes Mr Williams but decides to take no further action. In such a situation it would seem even if a new CEO is appointed LUFC is aware of the misconduct and, therefore, could not go on to pursue his dismissal on gross misconduct grounds as the breach of contract has been affirmed by the employer.

In my experience, this is not in fact an uncommon state of affairs. For example, it has not been an uncommon situation for an employee to do something wrong and then promptly tell their manager of this and for the manager to take no further action.

For employees and trade union reps this is a reminder of the basic principle that an employer as well as an employee may affirm conduct that is capable of repudiating the contract between them and it is one that it would pay to be alert do. In cases where an employee subject to disciplinary investigation readily admits to me (as their rep) that they did the misconduct they are accused of I often ask if they have ever told the employer this; it is surprising how many have.

In practice (and especially where documentary evidence is available) the very fact of prior notification is sufficient to see of the allegation, meaning there is no need to revert to more legal affirmation of contract arguments.

Strangely, and in my view wrongly, the Court of Appeal have in a case arising from the tragic Baby P case (Christou & Anor v London Borough of Haringey [2013] EWCA Civ 178) suggested the opposite and that where an employee has been investigated for an offense and been given a warning the employer can go back and ‘have a second bite’ and dismiss the employee for the same offense (and here, even if there was a difference of emphasis, it is clear the employer knew of all the relevant facts later relied upon). Clearly, in that case the fact that the employer did not dismiss in the first instance can be questioned but having made that decision seems to fly in the face of any concept of fair process. Thankfully, this type of situation will be exceptional but I certainly hope, in time, this case will be overturned.

Trade Unions Should Learn from Francis Maude’s Attack on PCS Union

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Eric Pickles - the first Secretary of State to attempt to remove Check-Off in the DCLG.
Eric Pickles – the first Secretary of State in the UK Government to attempt to remove Check-Off in the DCLG. He failed.

Unions in the Civil Service face a herculean task in needing to get each and every union member to effectively re-join their union following Francis Maude’s pressure to withdraw the ability of union members to pay their subscriptions direct from their salary. The challenge is one other unions can learn from. 

In his article for Civil Service World on the challenges currently faced from the Cabinet Office’s campaign to attack independent trade unionism in the public sector Mark Serwotka describes the challenges to trade unions well.

Serwotka writes:

In the dying days of the last Labour administration, I said if you judged a government by how it behaves as an employer, it was the worst we had ever known. But let there be no doubt, this current crop of ministers – who I hope, come May, will all be following in Francis Maude’s footsteps, packing boxes and saying their goodbyes to staff – have far outdone their predecessors.

Look at their civil service record. Ninety thousand jobs gone; pay and pensions cut, causing living standards to fall by up to 20%; redundancy terms slashed; working conditions rolled back; a hated and discriminatory performance management system; and more politicisation of the senior ranks.

Inseparable from this is the treatment of trade unions. We know how much further the Tories would seek to restrict union rights if they are re-elected. They have already cut facility time – which we also know benefits employees, employers and the wider economy – and, since 2010, they have degraded industrial relations beyond recognition. In the name of austerity, budgets and remits are so tightly controlled that the fiction of delegated bargaining plays out as both comedy and tragedy.

But it is the move against my union’s finances that is the real give-away. After Eric Pickles’s failed and costly attempt in communities and local government in 2013, the Home Office was the first major department to confirm its withdrawal late last year, followed by the Department for Work and Pensions. These hasty removals only make logical sense in the context of the general election. Tory ministers, fearing defeat, want to do as much damage as possible while they still can.

Despite the fact many large UK companies still use check-off because they recognise it is efficient, Maude claims there is nothing untoward about his mission to remove it. And in a frankly bizarre twist of reality, he has cited the fact we are signing up our members to pay by direct debit – a Herculean task to effectively re-recruit at short notice tens of thousands of people – as evidence that we agree with him.

But if there is no political motive, there is no rush. If it is more appropriate for a union to collect its own subscriptions, we could reach an agreement for a smooth transition over time that would not leave us out of pocket. That is, quite obviously, not what is happening.

There is little doubt that the move is intended to target organised labour in the UK Civil Service. When the removal of Check-Off was first attempted by the Department of Communities and Local Government (DCLG) led by the Conservative minister Eric Pickles the rationale was financial. The costs of administering the fund – estimated at £300 per union – were purported to be an unfair burden on UK taxpayer’s. In his attempts to save £300 a year for the UK taxpayer Pickles incurred legal costs – paid for by the UK taxpayer – of £90,000 after PCS successfully sought an injunction against the decision on breach of contract grounds. When consultations were ongoing PCS actually offered to meet the costs of the check-off system from the government so there is no question that the decision was not based on finance, as the Lib Dem Treasury Minister Danny Alexander himself more recently confirmed.

If not finance then what? It is I think simple – without an organised trade union it is all the more easy to push through detrimental changes in terms and conditions. This also explains the government’s eagerness to split the the collective voice of members (e.g., by granting Unison recognition rights), sidelining recognised unions from collective negotiations as proposed in HMRC, and supporting the establishment of staff association such as that in SOCA.  And, by moving to directly to remove check off, and therefore impact on the ability of the union to meets its financial obligations Francis Maude may have hit upon the most effective means of threatening trade unionism in the civil service.

However, as early as 2012 DCLG were urging local authorities to remove check off (emphasis added):

18. Some employees who are trade union members pay their union subscriptions by deduction from their pay at source. The money is then passed direct to the union by their employers. Employers are not required to provide this facility – known as‘check-off’ – or to keep making such deductions indefinitely.Where employers do choose to provide this service, they may also choose to charge the union for the administration involved in doing so.
19. Many councils seek to recover the cost of providing ‘check-off’ facilities by charging trade unions a proportion of the value of the fees collected – for example, from 0.5% to 5%. We consider that charging for collecting trade union subscriptions is one example of sensible savings that can be made in local government. Alternatively, local authorities have complete discretion to terminate such arrangements, and allow trade unions to adopt their own ways of collecting subscriptions (e.g. bank Standing Order or Direct Debit).
In point of fact, as DCLG was to find out, the claim of “complete discretion” for local authorities was misleading. In Hickey and Anor v Secretary of State for Communities and Local Government [2013] All ER (D) 24 the court decisively found the far from having “complete discretion” the decision of the department to withdraw checkoff was in actually in breach of contract.
But that decision has not dissuaded the Conservatives, cheered on by the likes of Conservative Home, from pushing through the removal of check off in departments even though there may be a contractual right to have deductions of union salaries direct from their salaries as there was in Hickey. 
But we are where we are. And as we face the prospect of new administrations in Local Authorities – and, sadly, we can’t rule out that some Labour led councils will not follow suit – there is every prospect that the battles that have beset PCS will be replicated across the UK in local authorities where check off remains. And so, in no particular order, here are some observations for other unions that may face these same challenges in the months ahead; they are all in fact quite straightforward and commonsensical:
  1. Study your contracts of employment – In PCS I think, even with the important win in Hickey we have been too reticent in pursuing breach of contract or JR proceedings. A robust, prompt and publicised legal challenge would have sent a message to other department and give pause for thought for some departments; although such a challenge is still possible it is in some already sense too late – the decisions have now already been made. So the advice is plan a case now – hopefully you won’t need to lodge it but if you do have your evidence lined up and get the case in early. One or two early wins could stop prevent a domino type run of check off withdrawal.
  2. Talk to the members – and non-members. This sounds any obvious one but the decision meant we have had to get out to members where they worked and engage directly with their concerns, essentially we had to recruit them to the union all other again. Do not rely on emails, sadly most members simply to do not read them. And don’t forget the non members too – the campaign to re-sign members to the union was also a boon for recruitment figures as thousands of new PCS members have joined the union.
  3. Don’t screw over your allies – employers have their ploys to undermine the union voice in a workplace and one of these is to play off one union against the other. Don’t fall into the trap and allow yourself to be a tool in someone else’s war. I will post more on this later but while here it was Unison taking the thirty pieces of silver Maude offered them and accepting union recognition (against a fair number of objections from the Unison ranks but which others had been advocating) there is no reason other employers will not use – for example – GMB to undermine Unison etc in other local authorities across the UK. Solidarity should be something unions live and breathe. The tactic was clear, encourage members to ‘union shop’ and so reduce the collective voice of workers as members are faced with the conscious decision to maintain their union membership.
  4. If you recruit new members onto check-off then stop. As the threat to check off became clearer PCS changed its application forms to only accept new applications with a direct debit mandate, even if an applicant’s employer allowed check off. In due course there will be a debate in PCS about whether the NEC (or, more likely, previous NECs) were too slow in making this change, but that is a debate for another day. However, a look at my branch records would reveal that had such a decision been made at the time the Conservatives came to power then the branch sign up rate to direct debit subscriptions would have been around 25% rather than the less than 5% it actually was when a decision to remove check off was announced. I cannot emphasise enough how much of a headstart that 20% would have made made to our organising efforts. So, if you allow new members to join onto check-off stop it now. Quite apart from anything else the industrial logic of having a union’s financial security in the hands of an employer they sometimes find themselves at loggerheads with is negligible at best!

What Will the Papers Say? Employment Law, Disrepute and the ‘Beautiful Game’

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denniswiseIn recent mainstream media reports there has been a focus on the appalling racist chants of a group of a group of Chelsea fans; this story has an employment focus as at least one Chelsea fan, finance worker Josh Parsons, has now been suspended from his work in the aftermath of the incident. Time will tell what the outcome will be but it is certainly the case that an employee’s conduct outside of the workplace may justify dismissal if this would harm the reputation of the employer.

In fact, in another football related case, Post Office v Liddiard [2001] EWCA Civ 940, the Court of Appeal determined that it was fair for an employer to take into account negative press coverage in making a decision to dismiss. In Liddiard the claimant was a convicted football hooligan (convicted in France) following an England v Tunisia game in Marseilles. The claimant’s actions attracted press attention with even the Prime Minister making comments applying pressure on his employer (the Post Office) to dismiss the claimant.

But in recent weeks there has been a more important interesting football related case that involves the well-known former Chelsea player, and Leeds United manager Dennis Wise. Gwyn Williams was a Leeds United finance director who joined in 2006. In 2008, he sent obscene ‘joke’ emails to three colleagues: Dennis Wise, Gus Poyet and a LUFC receptionist. There was no complaint about the emails from any of the three recipients.

Under his contract Williams was entitled to 12 months notice of termination of contract and his employer gave this on 23 July 2013. However, after this notice had been given the employer became aware of the earlier emails and dismissed Williams for gross misconduct, meaning Leeds United could avoid paying the close to £250,000 in notice pay it would otherwise have been able liable to pay Williams.

Williams then lodged a claim for wrongful termination of his contract of employment in the High Court and losses arising from the which was close to a quarter of a million pounds (but interestingly, did not make a separate claim of unfair dismissal – which may have had a different outcome had he done so since the case would then not have been one of contract alone).

Applying Boston Deep Sea Fishing and Ice Company v Ansell [1888] 39 Ch.D. 339 as the Court of Appeal here did, I do not think there is any doubt that the decision on wrongful dismissal grounds was legally correct. Boston, a case I recall from my brief period studying contract law, sets out that a wronged party is entitled to treat a contract as having been repudiated even if they only become aware of the repudiatory actions a considerable time after the event so long so long.

A central feature of this case however was the employer’s defense that the claimant’s actions would bring the employer into disrepute and that this is what justified the termination. As I have said I think the caselaw is decisive in respect of the the wrongful dismissal case – even though subsequent conduct of Williams was good the employer was unaware of the breach and so could not be said to have affirmed the contract.

Nonetheless, the decision does make me a little uneasy. I’ll go out on a limb and say I am not convinced believe that the chance to use the breach as a ground to save Leeds United a couple of hundred thousand quid was not a substantial factor in why Leeds United dismissed Williams for an offense that took place five years previous. After all, Leeds United justified their dismissal on risk to public reputation when there had been no exposure or harm to their reputation but, as a result of their action, that precise reputational negative coverage ensued.

And here, perhaps, Williams would have been better served by making an unfair dismissal claim as well. In Refund Rentals Ltd v McDermott [1977] IRLR 59 set out that it will be only in the exceptional case that a dismissal for conduct that took place a significant time previously. Likewise, in a case where a trade union was the employer, Associated Society of Locomotive Engineers and Firemen v Brady [2006] IRLR 576 ET, a dismissal on misconduct grounds when the determining factor was the claimant’s belonging to a particular political faction of the union. Likewise, if Williams could show that the chance of saving the employer a significant sum then he may have had an arguable case for unfair dismissal, notwithstanding the wrongful dismissal claim.

 

Reference: Williams v Leeds United Football Club [2015] EWHC 376 (QB)

PCS Union win court victory on changes to terms and conditions

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PCS has today announced that its challenge of the National Audit Offices decision to unilaterally change terms and conditions of service from its employees has been successful:

On 15 December, PCS won the important case against the NAO’s decision to reduce the contractual sick pay and leave of its existing staff.

This dispute started in late 2012, when the Cabinet Office wrote to all government departments, asking them to make sure the terms and conditions on offer to civil servants were in line with those provided by a “good, modern

employer”. In practice, this meant suggesting reductions in various terms and conditions, such as entitlement to sick pay. PCS organised a national response to this with the ‘Don’t rip up our rights’ campaign.

The Cabinet Office did not write to the National Audit Office, since the NAO is not part of government. Instead, it works directly for Parliament as its ‘spending watchdog’— certifying the accounts of government bodies and producing value-for-money reports on public spending.

Strong defence

But despite being independent of government, the NAO decided to reduce the terms and conditions it offered anyway. In fact, it decided to go further than government departments, and impose reductions on the contractual terms and conditions of its existing staff.

We mounted a strong defence, including a joint grievance, comprising 10% of the entire NAO workforce, a motion from the PCS group of MPs, and industrial action.

NAO management would still not come back to the negotiating table or make changes to their proposals. So, in 2014 we supported 2 members who took a test case to an employment tribunal. NAO management argued that the wording of the contracts allowed them to make changes to the terms and conditions of staff even without their agreement.

The NAO won this original tribunal case, having claimed they were following the example of Asda-Walmart, which had previously succeeded in doing something similar. But our legal advice said this was flawed.

In December, PCS took the case to an employment appeal tribunal and won. The EAT ruled that the NAO did not have the right to change the contractual terms of its staff without their agreement.

This ruling does not just benefit staff at the NAO. It also sets a legal precedent which should help to protect workers across the country from employers trying to impose detrimental changes in similar circumstances.

Although not stated in the briefing the case would appear to be that of Norman v National Audit Office. It does not look as if the reasons for the EAT’s judgement have yet been published.